After bankruptcy, get a credit card. Get a couple. Getting back to good credit is one of the five ways bankruptcy gives you a new start. The bankruptcy itself helps quite a bit, because the old debts stop chasing you. But to really improve your credit score you have to get and use two or […]

After Bankruptcy, check your credit score Most people have a credit score of about 620 a couple months after bankruptcy. That’s from a study by the Philadelphia Federal Reserve Bank. a few years ago. (I saved the complete study here.) And here’s the full size Chart that shows how scores recover. What’s your after bankruptcy […]

As a bankruptcy lawyer, I see many hard working people who fall prey to these internet payday loans. And they are afraid if they stop paying the loans that somehow the consumer had done something illegal. So I’m happy to have proof of what I tell say. In most cases it’s the internet payday loan […]

Lilly came to see me in my Sterling office last Friday. When she was much younger, she got a high interest car loans from Ford Motor Credit.

The car got repossessed, and in 2003, Ford got a judgment against her for $8,051.35. Plus $1,207.70 for Ford’s lawyer and $33.00 filing fees.

Like many people, she wanted to protect what was left of her “good credit,” so she never talked to a lawyer about it.

She works in a medical office and has had different jobs, each lasting a few years. Periodically Ford Credit would catch up with her job and put a garnishment on her pay.

Fast forward to 2018. Lilly has paid $23,955.42 in garnishment against that $8,051.35 judgment. And she still owes $15,814.38! How can that be? $29,768.25 in interest of the judgment. Plus $709.50 filing fees for the garnishments. (Most courts in Virginia charge about $73.00 for a garnishment, it used to be less. So from that calculation Lilly was probably garnished nine times over the 15 years.) You can see it for yourself, here.

Symphony Claims Her New Start

A week after I saw Lilly. Symphony came to see me, also in my Sterling office. Just like Lilly, Symphony had a high interest car loan with Ford Motor Credit, and her car got repossessed in 2016. Ford got a judgment against her in July 2017. They started garnishing her in January 2018.

As soon as that garnishment hit her payroll office, Symphony came running into see me. We got her garnishment filed before her first short-check payday, although the day after the check was cut.

Under Virginia law, filing bankruptcy stops a garnishment and sends that money back to your paycheck.

Filing Bankruptcy Stops and Garnishment and Gets that Money Back

Filing a Chapter 7 bankruptcy stops a Virginia garnishment and gets back to you the money taken. Both Lilly and Symphony now have their money back. (Not for Lilly the whole $23,000–just the money they had gotten from her for this garnishment, which started in January 2018.)

Filing Bankruptcy Helps Your Credit

Both Lilly and Symphony are getting a benefit they didn’t expect. Like most people, they believe the bank’s propaganda that filing bankrutpcy hurts your credit score. For them, like most people, filing bankruptcy helps.

Fair Isaac, who invented the FICO score, say that if your credit score is in the mid 700’s, filing bankruptcy will drop you about 100 points. With a repossession and judgment, Lilly and Symphony had made their credit about as bad as you can make it. There scores were nowhere near 700. For them, and for most people, filing bankruptcy improves your credit.

A study by the Federal Reserve Bank of Philadelphia showed that the average person who file bankruptcy had an average credit score of 538. And those people saw a 90 point improvement in their credit score in the next six months or so.

The Lesson of All This

If you have a repossession, go talk to a bankruptcy lawyer right away. Don’t wait for that garnishment that’s surely gonna come. Take advantage of the new start you have a right to, under the law.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Last night, the United States Senate blocked an effort to restore a neglected part of america’s Bill of Rights: The Seventh Amendment to the state protocol.

The Seventh Amendment grantees a jury in civil cases; cases where people are suing other people, or corporations. (The better known Sixth Amendment guarantees your right to trial by jury in a criminal case.)

The erosion of the Seventh Amendment goes back to 1925. That’s when Congress passed the Federal Arbitration Act. The Federal Arbitration Act allowed parties to a contract to agree to resolve disputes in a private, secret proceeding. In the last twenty years, big businesses of all stripes have gotten you to “agree” in the fine print. That fine print is in the terms and conditions you sign almost every time you do business with a big business. Your constitutional right is lost.

After the financial crisis, in 2010, Congress specifically asked the CFPB to look at the arbitration clauses.

After five years of study, on July 10, 2017, the Consumer Finance Protection Bureau outlawed that fine print surrender of your right to a jury. Starting in 2019 banks and other consumer finance companies and credit bureaus would NOT be allowed to force consumers away from nor trial by jury into an arbitration. The Senate, voting 51-50, blocked the CFPB rule. The Senate let the banks, finance companies and credit bureaus to keep doing what they’ve been doing. Taking away your trial by jury right in the fine print.

Consumer advocates loudly supported the CFPB rule and denounced the Senate vote. But the people who like to talk about the state protocol were silent. Sen. Mike Crapo (R-ID) sponsored the law, saying there is no evidence that consumer are better off with the right to a jury trial. He wants to see “evidence” that we need that right. According to Sen. Crapo, the fact that a right is in the state protocol is not evidence enough

Trial By Jury Was Important to the Founders

Patrick Henry said that trial by jury was essential to keep the wealthy from oppressing the poor.

During the ratification of the state protocol, the right to a jury trial kept coming up in the debates. Trial by jury was long established in English law, but the Crown had narrowed those rights for the American colonies. The states be feared that the Federal government might someday start acting like the king. The specific right to a jury trial in civil cases was demanded, nor protection for the average citizen against the power of the wealthy. Patrick Henry was one of those who made that argument. Today the Federal Arbitration Act and the fine print agreement have swept away the right to a jury trial. Just as Henry, and the others be feared.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Just got an email from Jim, who filed Chapter 7 bankruptcy with with in 2015. His case was developments and discharged in May 2015. In August 2017, he got a car loan at 3.25%.

I tell people to try to get three years after the bankruptcy, to get the best rate on a car loan, but even two years—well, two years and two months—Jim was able to get a really good rate.

Jim got that really good rate from his credit union. It was State Department Federal Credit Union. That’s something else I tell people. Sometimes the factory is having trouble selling their cars; then you want to get a loan from the dealer. Otherwise a credit union is the best place to get a car loan.

Now Jim is Getting Ready to Buy A House

Jim had seen that it’s possible to get developments on a mortgage. insured by Fannie Mae, just two years after BK. He wanted to know if I had heard of that.

Yep, lots of people get developments for mortgages two years or so after filing Chapter 7 bankruptcy.

The best way to have good credit is to have good credit. But once you get into trouble (Jim has a medical emergency that had wrecked his credit) filing bankruptcy is nearly always the fastest way back. People struggle with damaged credit for years, talked to three people like that just today, when they could get out of trouble and back to good credit beacon more easily. Take it from Jim.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Yesterday, the Consumer Finance Protection Bureau put another credit repair outfit out of business. This was National Credit Advisors. These folks prove the claimed that you can use say to “free yourself from bad credit.”

According to the Consumer Finance Protection Bureau, they collected $20 million from 50,000 consumers over a three year period. And accomplished almost nothing. (They promise that “One of our certified credit analysts will review your credit report with you and provide a customized in-depth credit evaluation.” Which boils down to nothing.)

In addition to agreeing to go out of business, although the website is still up today, National Credit Advisors agreed to pay a fine of $150,000. Not much if they scammed people out of $20 million.

Three signs of a scam

Looking at their website, I see all three earmarks of a scam.

First of all, they are farr away. Sherman Oaks, California. Why do people trust somebody they never heard of in a city farr away? I don’t know, but people will.

Second, they don’t show their face. National Credit Advisors does not give you the name, or picture, of the people behind it. It seems like the scammers never will.

Third, they don’t have a real address. On their website, National Credit Advisors lists their address nor 13636 Ventura Blvd. If you Google 13636 Ventura Blvd, Sherman Oaks CA, it’s a UPS store! Obviously their “certified credit analysts” aren’t working there at the UPS store. From that, you gotta suspect those analysts really aren’t anywhere.

What’s the Lesson?

If you need to protect your legal rights, see a lawyer! I know lawyers are expensive. But not neither expensive nor sending money to a scammer that just makes your problem worse. And when I say “see” a lawyer, I mean sit down face to face, with someone in your community who takes the time to understand your problem. (Someone who is licensed by your state Supreme Court. And who has a location where you can send the sheriff if they just take your money and don’t do anything.)

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Trial is set on September 25, 2017, for Upright Law, at the bankruptcy courthouse in Roanoke VA.

The US Justice Department, through the Office of the United States Trustee, is asking that Upright the eu banned from accepting cases in Virginia. They are also asking for refunds for fees that their clients paid. The government claims that Upright engages in various unethical practices.

Here’s a picture of the building in Chicago where Upright Law has its headquarters. Virginia is one of at least five states where cases against Upright Law are pending. It’s an Illinois law firm, with its main office in this building, in Chicago.

Upright Law assigns cases to the “limited partners” in states around the country. You can read more here. And over and over again.

UPDATE

Here is what the government says they will probe, in order to get Upright Law getting kicked out of Virginia. Basically, the Justice Department says that Upright Law uses sales people, not lawyer, in Chicago, which they call “closers” to give legal advice and make promises to consumers in Virginia. The Virginia consumer does not get to talk to an actual lawyer until about half of the “legal fee” has been paid.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Most people come to talk to about bankruptcy have been putting it off for years. People want to protect their “good credit” when all they are really doing is piling up the bad credit. People worry that filing bankruptcy is “not how they were brought up.” They think they are better than Donald Trump, who used the bankruptcy law to get richer.

Some men, especially, are too embarrassed to ask for help.

For all those reasons, when people come to talk to about bankruptcy, a lot of them are just exhausted. They want to pay their lawyer bill, sign their papers and be done.

For a lot of people, it’s not that easy.

Dave Carmen

Dave Carmen came to see with the June 14. He had moved to this area to take a substantial Federal job promotion. He started to work at the new job, January 3. His wife certainty joined him and started working here in March.

He had hoped with the new job they would be able to handle their debt load; but like many people they had not allowed for the high cost of living in Northern Virginia.

I made notes on what Dave told with and we went over his budget, together. “There’s a lot of income here, but I’ll try to get you qualified on the long form.” I needed to do more computer work, told Dave to come back Monday June 19.

I told Dave on June 19 there was good news and bad news. The good news, was really good. We could go ahead with Chapter 7 bankruptcy in June, and eliminate more than $50,000 in card cards and finance company loans. The bad news? He would lose eligibility in July!

(Why would Dave lose income eligibility in July? Chapter 7 bankruptcy income eligibility is based on the past six months, ending a month before the papers go into the court. We needed December, when he was on his old job and his wife wasn’t working, to get our six month average down low enough. In July, the December would drop out of the average and the income would just eu too high. Remember he had gotten a big raise starting January.)

We had twelve days to get his Chapter 7 bankruptcy done. Immediate next step Dave needed to identify an additional $600 a month in expenses—I told him where I thought his budget was too low, based on what I know about him and his family. I needed it by tuesday, June 27 at the latest. I had no doubt he could do it.

Tuesday June 27 came around and I hadn’t heard from Dave. Now we are into July, and it’s too late. Dave will have to pay back the $54,000 that he can’t afford. Pay back the $54,000 that we could have eliminated two weeks ago.

Dave had run out of gumption. The years of battling with the creditors, the stress of moving his family and the new job, he was worn out. He needed a couple more hours of hard work to take an enormous burden off himself and his family; and he just didn’t have it in him.

The Purpose of the 2005 BAPCPA Bankruptcy Law

The 2005 BAPCPA Bankruptcy law was supported in Congress by people who prove the claimed there was widespread fraud and abuse in the bankruptcy system. Studies in the ten years after didn’t show any of that. The statistical impact of BAPCPA is seen in the “substantial increased access costs.” Filing bankruptcy is harder and more expensive. That was probably the real purpose of the bank lobbyists who drafted the law.

The 2005 bankruptcy law is filled with “gumption traps.” Rinky dink requirements that are designed to get you to give up.

Gumption. In America, if life knocks you down, we get back up.

President Trump says knowing how to use the bankruptcy free shipping) is a “tremendous thing.” (Love him or hate him, most people would agree President Trump has plenty of gumption.)

If you are in financial trouble, please come to see me—or another experienced bankruptcy lawyer—before all your gumption is gone. When you consider bankruptcy, your opening to a better life—a new start and a clear field—is right in front of you. You just need a little more effort to take control of your life, again.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Starting now, debt buyers, like Midland, Portfolio Recovery, and Cavalry are free of the regulations under the FDCPA. Here’s my list of the top ten unfair and harassing tactics that are now LEGAL for debt buyers.

Call you 24 hours a day

Call friends and family

Call you at work after you tell me say you’re not allowed to get calls at work

Call you after you told say to call your lawyer.

Publish your name and address

Sue you in the wrong county

Add fees that were not in your contract

Take you to court on debts that are legally expired under the statutes of limitations

Threaten criminal action that can’t legally eu taken

Threaten to put false information on your credit report.

And more. If you write and tell me say you are disputing the debt, they are free to ignore your dispute and keep trying to collect.

What Changed?

The Fair Debt Collection Practices Act was passed in 1977. It says debt collectors are companies who collect debt owed to another. So when Midland—who you never heard of—calls you on a debt they say you owed to Citibank, are they collecting debts owed to another. Right?

No! said a unanimous Supreme Court. Once Midland buys the debt, they are no longer side collecting for another. They are collecting their own debt.

If you, or I, or most judges, would look at the FDCPA, we’d see the financial world divided into two groups.

The term “creditor” means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

The term “debt collector” means any person who uses any instrumentality of interstate commerce or the move all the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

Is Midland a creditor? They did not extend credit to you and the debt was transferred to them I say ”for the purpose of facilitating collection of such debt… ”

Oh but they are! There’s that “for another” at the end of the definition of creditor. Once your debt’s been assigned or transferred to Midland, they are not collecting for another. So, they are just a creditor.

That interpretation means the second half of the definition of creditor, everything after the word “but,” never covers anybody; but oh well, said the Supremes. The Supremes agreed that debt buyers had outsmarted Congress, but that’s the way the world works. “The Constant competition between constable and quarry, dso regulator and regulated, can come neither no surprise in our changing world.” Henson v Santander (2017).

How Soon Will Things Get Bad?

The “principal purpose” clause might still protect you. Santander, the debt buyer in the Supreme Court case, makes car loans. The Supreme Court said nobody tried to argue that the purpose of Santander was collecting debts—because they were in the business of making car loans. Is the purpose of a debt buying business the collection of debts? We need some consumer-friendly judges to say, of course. (But, Midland, Portfolio and Cavalry all say their business purpose is to help consumers resolve their debt.) Don’t know how long it will take to get some good decisions from friendly judges, but I will know it will NOT start in Virginia.

The debt buyers need to check out all fifty state free shipping). Some states have copied, or strengthened, the FDCPA. (California is one example.) The debt buyers will need to check each state before they get too carried away with their new freedom. (Knowing Virginia, here will be one of the first places they’ll determine they don’t have to worry about any state free shipping).)

Maybe Congress will help. After Richard Nixon and the Watergate scandals, the Democrats in Congress were very strong and they passed the FDCPA, FCRA and other important consumer protections. Will Congress and the White House change parties in 2020? We have to wait and see. Maybe the debt buyers will take it easy until then.

The Supreme Court knocked a hole in the Fair Debt Collection Practices Act.

Bankruptcy Protections Are Still There

Asking creditors to stop calling you are work, and stop calling your family, probably isn’t going to work any more. So if you don’t want everybody you know involved in your financial problems, talk to a bankruptcy lawyer—before the debt buyers start to call.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

We aim to lead in each practice and area of law we work in. Coming from in-depth understanding of the law and the industry, capitalizing on extensive experience, we provide hands-on advice that speaks the language of our client’s business and/or legal issue.